- The Washington Times - Friday, May 22, 2009

NEW YORK | American International Group Inc. on Thursday said the chairman and chief executive handpicked to lead the company when it was rescued by the government last fall will step down.

The company also said its board agreed with a recommendation from Edward M. Liddy, who took over the insurer in September, to separate the chairman and CEO roles.

Mr. Liddy, in an interview, said splitting the roles reflects not only the evolving standard for public companies, but practical matters as the giant insurance company moves to split off businesses and restructure. “It’s not just corporate governance, it has to do with the work load going forward,” he said.

AIG will be splitting off as many as three companies, Mr. Liddy explained, and the chairman will have to pick leadership for each. It will also be up to the chairman to help bring six new independent directors up to speed after they are elected at the company’s annual shareholder meeting June 30.

Meanwhile, “being CEO of this organization is already a 24/7 job,” Mr. Liddy said.

“When both those individuals are found, I will be able to return to retirement,” he said. Noting that it is likely to take three or more years to turn the company around, he added, “I don’t want to be doing this when I’m 67.”

Mr. Liddy, now 63, retired as CEO of Allstate Corp. last year. He was named chairman and chief executive of AIG on Sept. 18, in connection with the federal bailout.

AIG has received $182.5 billion in financial support from the government since September. As part of the loan package, the government has taken a roughly 80 percent stake in the huge insurance company.

Mr. Liddy, who agreed to run the company for an annual salary of $1, refused an equity grant he was expected to receive as compensation. According to a proxy filing with the Securities and Exchange Commission, he received no bonus, stock-based compensation or other direct compensation from AIG last year.

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